8089.T

• Company Overview & Core Business

  • Founded in 1950, 75th anniversary in 2025, listed on the Tokyo Stock Exchange Standard Market, over 2,800 consolidated employees, 179 total locations nationwide centered on the Tokyo/Kanto region.
  • Two core business pillars: B2B building materials distribution (75% of total full-year revenue) and B2C housing/real estate development (25% of total full-year revenue), with additional operations in logistics, construction, and cable TV.
  • Core philosophy: "We realize rich housing and living based on trust", with integrity as the core management principle.

• Updated Medium-Term Management Plan: Road to 2030

  • Updated from the 2023 plan in response to market changes, targeting 55 billion yen in incremental revenue and 3 billion yen in incremental operating profit over the 5-year plan period.
  • Identifies seven growth drivers to capitalize on expanding market segments amid the long-term decline in new housing starts:
    1. Domestic wood supply: Expanded production capacity at the Tokushima mill (target 655,000 cubic meters of annual domestic wood handling by 2027), developing new domestic wood-focused products including the 100% domestic wood MOK UNIT modular housing and wood hybrid base-isolated condominiums.
    2. Non-residential wood construction: Joint venture with Tobishima Construction to develop mid-rise (4-6 story) non-residential wood construction, leveraging lower cost compared to reinforced concrete construction.
    3. Pre-owned condominium buy-renovate-sell: Launched the RIZ WOOD domestic wood-focused renovation brand, targeting growth from 150 units annually currently to 500 units annually by the 2030 March fiscal year.
    4. Comprehensive condominium management: Targeting 100,000 managed units through organic growth and acquisitions.
    5. Rental property management: Acquired Arai Shoji Building Management in October 2025, growing total managed units to over 11,000, with verified economic value from wood-based renovation increasing rental rates.
    6. Energy-related building products: Added CEREX, a leading sash/exterior supplier with 6,000 units of annual supply, to expand product offerings and service area.
    7. Logistics: Expanding 3PL third-party logistics business beyond internal group needs.

• Human Capital Management

  • Prioritizes skill development, mid-career hiring, improving employee engagement, advancing DE&I, and promoting health-focused management.
  • Holds annual group-wide policy meetings to align all employees on strategy and shared corporate philosophy.

• 2026 Interim Financial Results

  • Achieved top-line and bottom-line growth across all segments, with revenue hitting an all-time interim high. The company has advanced profit leveling, moving away from its historical second-half heavy profit structure, and has maintained interim profitability since the 2021 March fiscal year.

• Full-year 2026 March fiscal year consolidated guidance is maintained at previously announced levels, with no upward or downward revision. While interim profit progress appears slightly slow, contracted but not yet delivered condominium and single-family home properties for the second half are progressing on schedule, and full-year results are expected to come in roughly in line with plan.
• In the housing segment, 193 units were recorded in the interim period, with 386 already contracted units waiting for delivery, putting full-year progress roughly in line with prior year levels.
• The company maintains a progressive dividend policy, planning a 7 yen per share annual dividend increase through the 2030 March fiscal year, reaching 100 yen per share by 2030. The interim dividend for 2026 is confirmed at 28 yen per share, in line with prior guidance.
• The company introduced a shareholder benefit program in June 2024, offering QUO cards with donations to greening initiatives twice per year based on shareholding level and holding period.

For the 2026 March fiscal year first half (interim period):

1. 建築資材セグメント (Building Materials Segment): Revenue increased 10.2 billion yen year-over-year, driven by expanded sales of sashes/exteriors and growth in new customer accounts. This segment contributes approximately 75% of total company revenue.
2. 住宅セグメント (Housing Segment): Revenue increased 2.5 billion yen year-over-year, driven by higher units recorded for new and pre-owned condominium buy-renovate-sell, solid rental management performance, and revenue recognition for whole income-producing properties. This segment contributes approximately 25% of total company revenue. Operating profit for this segment has recently surpassed that of the building materials segment.
3. その他セグメント (Other Segments): Revenue increased year-over-year, driven by solid performance from construction and cable TV businesses. All three segments achieved over 10% year-over-year revenue growth and over 30% year-over-year operating profit growth, with each segment adding more than 200 million yen in operating profit compared to the prior year period. Total consolidated interim revenue reached 119.6 billion yen, a 13.5% year-over-year increase and an all-time high for the company's interim period.

• Long-term structural decline in new housing starts driven by population decline, which reduces overall demand for new residential construction.
• Volatility in imported lumber prices and foreign exchange rates, with long lead times for ocean shipments exposing the company to price fluctuations between order and delivery.
• Intensifying competition for residential land acquisition, driven by broad industry interest for limited developable parcels.
• Long project lead times for new condominium development expose the company to market price volatility and inventory risk.
• Regulatory changes including the revision of the 4th Building Code特例 have caused temporary delays in new single-family home project approvals and construction timelines in the first half of the fiscal year.

Q: New housing starts are in long-term decline, with owner-occupied housing at record lows. How will the company overcome this shrinking market? / A: Management acknowledges the long-term decline is unavoidable due to population reduction. It has two core countermeasures. First, it will expand share of materials supplied per new home by adding underpenetrated product lines like sashes and exteriors to increase revenue per unit even as total starts fall. Second, it will focus growth on three high-potential expanding areas: domestic wood, non-residential construction, and existing housing stock-related businesses (renovation, pre-owned sales, management), where it can leverage its competitive advantages to grow despite new housing declines. (197字符)

Q: What is NICE's competitive advantage vs. peers, and does it have competitors across all its business segments? / A: Management notes that individual business lines have competitors, but no other single company covers the full range of building materials distribution and housing real estate businesses that NICE operates, which is its core unique advantage. It leverages cross-business synergies: B2C housing operations give it early insight into homebuyer trends, which it feeds back to B2B building material customers to improve product recommendations. It can also share expertise in new lines like pre-owned condominium renovation with local building material customers, creating new business opportunities. Its deep expertise in wood products for residential construction is also a unique competitive advantage matched by few other peers. (413字符)

Q: NICE's PBR trades below 1x and its PER is in the lower tier of the industry. What measures will you take to improve these valuation metrics, and what about acquisition risk? / A: Management recognizes the low stock price is an issue that needs to be addressed, and accepts it reflects unmet market expectations. The main causes are the complexity of the company's diversified business model leading to a conglomerate discount, and historical volatile/back-loaded profit creation that reduced investor confidence. The company will strengthen IR activities to improve transparency, level out profit recognition across the year to create more stable earnings, execute the medium-term plan to improve overall profitability, and commit to a clear progressive dividend policy of 7 yen annual increases through 2030 to improve shareholder returns and market sentiment. (410字符)

Q: How does NICE manage risk from lumber price and foreign exchange volatility? / A: For foreign exchange risk, the company uses forward exchange contracts for a portion of import orders to reduce the impact of sharp sudden exchange swings. For lumber price volatility, imported lumber has long lead times (3-6 months) from order to delivery, which creates unavoidable price exposure. To mitigate this, the company is increasing its share of domestic lumber, which has much shorter lead times (just a few days even from distant regions) that reduces exposure to large price swings between order and delivery, and helps stabilize overall procurement costs. (292字符)